In the November 18 edition of The Royal Gazette, Correia Construction commented in an advertisement on this newspaper's stories about the new cruise ship pier at Dockyard. The Gazette wishes to respond to some points made by the company.

The stories, which were published on November 10, focused on a project that has cost the taxpayer around $60 million – 70 percent more than was originally budgeted.

Our reporters Amanda Dale and Jonathan Kent spent many hours interviewing various sources, including Correia director Dennis Correia and contracts administrator Jane Correia, as well as Louis (Skip) Gardella, owner of Connecticut-based subcontractor Norwalk Marine International (NMI).

Many of the statements made by Correia Construction in its advertisement reiterate what was reported in the stories.

However, this newspaper believes clarification is necessary over some of the company's statements.

'Ton of money' e-mail

Correia said: "The Royal Gazette produced at least one document to Mr. and Mrs. Correia during the course of the interview which the Correias were able to show differed from the signed document on file.

"For some reason The Royal Gazette did not produce this 'make a ton of money' e-mail for them to comment on in advance of newspaper publication and Correia Construction have not been able to verify its authenticity – a review of Correia's electronic records does not substantiate that any such e-mail was sent."

RG response: The document whose authenticity was questioned by the Correias during the interview – and to which they are referring here – was the first page of the Bill of Quantities, exchanged between Correia and NMI during their contract negotiations.

This page summarised the planned total costs of the project. One of its two grids appears to apportion costings for the $9 million advance payment made to Correia by Government.

The Correias showed our reporters a different document that illustrated that the advanced payment was spent differently to what was indicated in the Bill of Quantities.

Neither document was used as a basis for any of our stories.

Correia Construction now accepts that the document was authentic and was a draft document which was sent to the Correias in July 2007 by NMI's US lawyers as part of contract negotiations.

The Royal Gazette has taken expert advice on the authenticity, source and tracking of the "ton of money" e-mail and the technical analysis we have received leaves us satisfied that it is genuine and that the source was a Blackberry device linked to Mr. Correia's e-mail address.

It is true that our reporters did not ask Mr. Correia for a comment on this e-mail during the interview with Mr. and Mrs. Correia.

The comments made in the brief e-mail were self-explanatory and not central to the story.

The focus of the interview, from our reporters' viewpoint, was to invite the principals of Correia Construction to give their side of this extremely complex story, focusing on the reasons behind the project's cost overruns, which easily filled the available time.

Why did the rental fee for a crane rise from $8,000 a month to $10,000 a week?

Correia said: "There appears to be confusion about the cost to the contractor of operating a crane, which was priced to the Government on a weekly basis versus the cost to the contractor of the bare bones rental from the sub-contractor, which was charged on a monthly basis.

"The bare bones crane was initially rented from Norwalk Marine International (NMI) in the USA for $8,000 per month. That crane was shipped to Bermuda at a cost, duty paid on the monthly rental at 33.3 percent, and insurance paid on its operation.

"The crane used approximately $1,000 in fuel per week and was operational six days per week at ten-plus hours per day. Factors that make up the weekly price quoted to the government are:

Bare bones crane rental; Duty; Monthly fuel cost; Insurance; Profit allowance; Crane Operator; Repairs and Maintenance; Shipping the crane into and out of Bermuda.

"$10,000 per week = $1666.66 per day. Per hour the crane was charged out at $166.66 inclusive of ancillary costs noted above.

"All rates were proposed by Correia Construction in advance of the original government contract signing and approved by the appropriate authorities including the engineering firm and the government.

"The rental price of $8,000 appeared appropriately in the subcontractors draft contract not Government's contract. The price to the government was as quoted, it never changed.

"During the course of the contract NMI and Correia disagreed over the amount to be paid to NMI over and above the $8000 which resulted in Correia later making the business decision to purchase a crane outright instead of continuing the rental."

RG response: Our story was about what Correia paid the subcontrator (NMI) for the crane and NOT what Correia charged to Government for this piece of equipment.

The facts, according to the documents witnessed by our reporters and as reported in our story, were:

1. The rental fee for the Link-belt crawler crane, quoted in the draft contract between contractor Correia Construction and subcontractor Norwalk Marine International (NMI), was $8,000 a month.

2. What Correia Construction actually paid to NMI for the crane rental was $10,000 a week, as shown in the NMI's financial records. (The total amount paid by Correia to NMI for all equipment, rentals, labour, etc. for this project was around $2.7 million, a figure that was the same in the financial records of both companies.)

3. A Bermuda Customs declaration form dated July 23, 2007, shows the crane was shipped into Bermuda on June 10. It shows the crane was brought in by Correia on an 18-month rental agreement for $780,000 — or $10,000 a week — and indicated duty of $391,000 at a 50.25 percent rate.

4. Correia bought the crane from NMI in October 2007 for $300,000.

5. After the purchase, Correia continued to pay $10,000 a week to NMI for the crane through July 2008, entered into NMI's books as either "management fees" or "equipment fees".

6. Correia sold the crane back to NMI for $1 in August, 2008.

Both Mr. Correia and Mr. Gardella were invited to comment on the rationale behind this arrangement and both did so for our story.

$600, 000 settlement paid by Correia to NMI

Correia said: "The article seemed to infer that this money was paid to the employees or was paid to Norwalk to enable Correia to hire the employees.

"While it is not clear to Correia why this matters, neither is true as is clearly stated in the settlement agreement executed by Norwalk and shown to the Gazette reporters."

RG response: The Royal Gazette has seen the settlement document between Correia and Norwalk, which settles issues relating to the contract between the two companies, dated March 16, 2009.

We have also seen signed and sealed mutual release agreements from Connecticut Superior Court, also dated March 16, 2009, which released John Amenta and Rich Preli from any contractual obligations with Norwalk Marine. The two men were then already working for Correia.

Also at this time, Correia paid Norwalk Marine $600,000. Mr. Gardella said the $600,000 payment was in exchange for him dropping further legal action over his former employees over alleged breach of contract.

Responsible journalism

Correia said: "Accuracy in reporting of the facts inclusive of decisions to omit facts is paramount to responsible journalism. This would include researching the legitimacy of documents produced and 'leaked' to the media and the credibility of the sources."

RG response: We are satisfied with the legitimacy of all the documentation used in our stories, none of which this newspaper has ever described as "leaked".

It was all shown to us openly by people directly involved in this project, as we reported. We are also satisfied with the credibility of all the interview subjects.

There were differences of opinion between sources on some matters, as we reported.

We delayed publication of the story for a considerable time to ensure that the principals of Correia Construction could have their say and so that we could write a full and balanced account of this highly complex matter.

We believe that this story has cast some light on the reasons behind the substantial cost overruns on the Dockyard project, which is a matter of serious public interest, and that this was indeed an example of responsible journalism.

The Royal Gazette stands by its stories.